New edge proposed: inside_bar_breakout_with_expanding_volume — E8 Intelligence Research

Abstract

{ "name": "inside_bar_breakout_with_expanding_volume", "source": "Al Brooks, Price Action (trading range breakout)", "type": "entry_engine", "rule": "Long (or short) when the current bar closes beyond the high (or low) of the preceding inside bar (a bar whose range is entirely within the prior bar's range), provided the breakout bar's volume is at least 1.3 times the 10-bar average volume.", "pseudocode": [ "if bar[i-1].high < bar[i-2].high and bar[i-1].low > bar[i-2].low:", " inside_bar = true", " vol_avg = average(volume[i-10:i-1])", "else inside_bar = false", "if inside_bar and bar[i].close > bar[i-1].high and bar[i].volume >= 1.3 * vol_avg:", " signal = long", "if inside_bar and bar[i].close < bar[i-1].low and bar[i].volume >= 1.3 * vol_avg:", " signal = short" ], "why_it_works": "An inside bar compresses volatility, and a breakout with above-average volume indicates real directional commitment after accumulation." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com